Global investors hungry for Shenzhen’s US$775 million dim sum bond, the first mainland Chinese local government debt issued in Hong Kong

The 5 billion yuan offshore yuan-denominated bond is oversubscribed by 2.5 times, drawing orders from global governments, insurers and pension funds

Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor said it would boost the city’s role as an offshore yuan trading centre

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Carrie Lam Cheng Yuet-ngor (R), Chief Executive of Hong Kong, and Laura Cha Shih May-lung, chairwoman of the HKEX, strike the gong marking the launch of the bond on Tuesday. Photo: HKEX

Published: 5:43pm, 12 Oct 2021Updated: 10:48pm, 12 Oct 2021

International institutional investors and overseas governments piled into Shenzhen’s 5 billion yuan (US$775 million) dim sum bond on Tuesday, the first direct offshore debt offering by a local-level mainland government in Hong Kong.

The offering, which has tenures of two, three and five years, was oversubscribed by 2.5 times, attracting 17.4 billion yuan in orders from 89 global governments, insurers and pension funds, according to an announcement by the Shenzhen municipal government.

Hosting a ceremony to mark the occasion, Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor hailed it as a boost to the city’s credentials as a finance hub.

“This is the first time a mainland municipal government has issued a yuan-denominated bond in Hong Kong for international investors to trade. It will enhance Hong Kong’s role as an international financial centre and as an offshore yuan trading centre,” said Lam.

Investors bid for the offshore yuan-denominated debt, also known as a dim sum bond, via tender through a mechanism run by the Hong Kong Monetary Authority (HKMA) called the Central Moneymarkets Unit (CMU).